Opinion
Case No.: 20cv933-L-KSC
05-11-2021
MIKE ABOUMRAD et al., Plaintiffs, v. BORREGO SPRINGS FIRE PROTECTION DISTRICT, Defendant.
ORDER GRANTING JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT AND DISMISSING ACTION WITH PREJUDICE
(ECF NO. 18)
Pending before the Court in this collective action alleging violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"), is a Renewed Joint Stipulation for Approval of Settlement Agreement and Dismissal of Case with Prejudice (ECF No. 18, "Joint Motion"). For the reasons stated below, the Joint Motion is granted, and this action is dismissed with prejudice.
This action was filed pursuant to 29 U.S.C. § 216(b) by Defendant's employees. (See ECF no. 1 ("Compl.").) They alleged Defendant used an unlawful compensation computation method which undercounted Plaintiffs' "regular rate of pay." (Id. at 2.) This, in turn, resulted in an alleged violation of 29 U.S.C. § 207 by underpayment for overtime. (Id.) Plaintiffs sought unpaid overtime with interest, an equal amount of liquidated damages, and attorneys' fees as provided by 29 U.S.C. § 216(b). (Id. at 13.) They also requested a finding that Defendant's conduct was an intentional, knowing, and willful FLSA violation so as to entitle them to a longer statute of limitations. (Id.) Finally, they requested injunctive relief ordering Defendants to change their compensation policies. (Id.) The Court has jurisdiction pursuant to 28 U.S.C. § 1331.
The FLSA allows for a private action against an employer for violations of 29 U.S.C. § 207 "by any one or more employees for and on behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). However, "[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party." Id.
Twenty-five of Defendant's employees ("Employees") filed a Consent to Be Included as an Individual Plaintiff. (ECF Nos. 3, 17 ("Consent").) With the Joint Motion, the parties request the Court to approve the Settlement Agreement and Release of Claims (ECF No. 18-3, "Settlement") between Defendant and Employees. (Joint Motion at 9.) "FLSA claims may not be settled without approval of either the Secretary of Labor or a district court." Seminiano v. Xyris Enter., Inc., 602 Fed. Appx. 682 (2015).
In exchange for a release, Defendant agrees to pay each Employee the sum listed on Exhibit A to the Settlement. (Settlement ¶2, Ex. A.) The individual sums amount to $100,000, and range from $17,316.78 to $109.15, depending on the number of overtime hours each Employee worked during the settlement period. (ECF No. 18-1 (Decl. of David E. Mastagni, Esq. ("Mastagni Decl.") ¶12.) In addition, Defendant agrees to pay Employees' attorneys' fees and costs in the sum of $35,000. (Settlement ¶2(c).) Attached to the Settlement is each Employee's Acknowledgment Form, acknowledging his understanding of, and agreement with, the Settlement. (Settlement Ex. B.)
The amount awarded to the Employees under the Settlement represents a compromise between the maximum award available if Employees prevailed at trial on all their claims, and numerous disputed issues which could delay final resolution of this action and render its outcome uncertain. (See Mastagni Decl. ¶¶ 15-16; ECF No. 18-2 (Decl. of Alison D. Alpert, Esq. ("Alpert Decl.")) ¶¶9-12.) The compromise was reached after informal investigation and discovery to arrive at the potential value of each Employee's claim and evaluation of Defendant's defenses. (Mastagni Decl. ¶ 14; see also Alpert Decl. ¶8.) Based on the nature of this action and the work and expertise necessary to reach the Settlement, the Court finds that the sum of $35,000 for attorneys' fees and costs is reasonable. (See Mastagni Decl. ¶¶2-6, 17-22.) The Settlement represents a reasonable compromise, and is therefore approved as fair, adequate, and reasonable.
Accordingly, it is hereby ordered as follows:
1. The Joint Motion is granted.
2. The parties shall discharge their duties and obligations in accordance with the terms of the Settlement.
3. This action is dismissed with prejudice.
IT IS SO ORDERED. Dated: May 11, 2021
/s/_________
Hon. M. James Lorenz
United States District Judge